Cherry AG

Investor Presentation • Aug 11, 2022

H1 2022 INVESTOR PRESENTATION

August 11, 2022

CHERRY MANAGEMENT BOARD

Rolf Unterberger - CEO Bernd Wagner - CFO Dr. Udo Streller - COO

CHERRY AT A GLANCE – FINANCIAL HIGHLIGHTS H1 2022

* Basis: Unaudited condensed consolidated interim financial statements of Cherry AcquiCo GmbH (now Cherry AG).

CURRENT BUSINESS SITUATION AND MARKET ENVIRONMENT

MAIN HIGHLIGHTS IN H1/2022

• New customer announcements for market launch of high-end devices featuring ULP switches (e. g. DELL, MSI, XMG, Corsair)
• Launch of several new wireless gaming devices
• Further expansion of product portfolio and sales channels strong growth in e-commerce for office peripherals

• 100,000 e-health terminals sold in German telematic infrastructure (July)

• Several new awards (e. g. German innovation award for ULP)

MARKETS AND ECONOMIC ENVIRONMENT

• Supply chain disruptions and lock-downs in China
• Keyboard markets in China/USA/Europe are temporarily slowing down
• Lower demand and high inventories at manufacturers and distributors
• Soft economic outlook for end consumer demand in 2022 due to inflation
• Long-term secular market trends remain positive

MOST RECENT PRODUCT LAUNCHES BY EXAMPLE

CHERRY MX 8.2 TKL Wireless – elegant gaming professional Wireless and incredibly fast with a latency of less than 1 ms

CHERRY MW 4500 – more ergonomics, less fatigue Angled shape corresponds much better to natural wrist position

CHERRY PROFESSIONAL – LATEST DEVELOPMENTS

NEW PRODUCTS AND MARKET TRENDS

• Portfolio expanded, including wireless technology with focus on:
• Ergonomic design
• Optimized typing feel due to ULP tactile switches
• Reduced form factor without number pad
• High-quality materials
• Specific radio frequency and Bluetooth® standards
• Further products under development for knowledge workers, streamers and creators

E-COMMERCE – CURRENT STATUS

• E-commerce Europe is further growing
• Focus on digital sales market in the USA

DIGITAL HEALTH – CURRENT AFFAIRS

• Strong growth with expanded market share
• The "Telematics Infrastructure 2.0" is currently being designed and new software- and service-based revenue streams with the next generation of telematics infrastructure are expected from 2025 to 2027

Slidepad Ergo

eHealth Terminal ST-1506

CHERRY GAMING – LATEST DEVELOPMENTS

NEW SWITCHES / SWITCH VERSIONS

• Market launch of CHERRY MX Ultra Low Profile switch (tactile version) for use in premium Office Notebooks
• Development of new analogue switch technology with customizable functionalities nearing completion, allowing for a completely new gaming experience

NEW GAMING DEVICES / KEYBOARDS

• Portfolio expansion with new CHERRY Advanced Wireless Technology keyboards with only 1ms latency, creating an upgrade cycle (e. g. MX3.0S, MX8.2S, MX2.0S)
• New gaming devices with smaller form factors to meet current market trend (esp. 60-80% keyboards) (e.g.: MX3.0S TKL as well as 60% keyboard versions MX LP2.1 and MX LP6.1)
• Launched new gaming mice MC1.1 and MC1.1 Plus to enter the big entry gaming mouse market segment
• New special edition variant of MX2.0S dedicated for cyberbars and Internet cafes in China

CUSTOMER / PRODUCT LINE-UP FOR NEW CHERRY ULP-SWITCHES

SIGNIFICANCE OF PROFESSIONAL BUSINESS CONTINUES TO GROW

PERFORMANCE Q2/H1 2022 OVERVIEW

In €m/ as indicated	Q2/22	Q2/21	∆	H1/22	H1/21	∆
Revenue	32.9	42.6	22 8% -	65.9	80.3	18 0% -
Gross profit	11.0	17.6	37 8% -	20.8	33.1	37 2% -
Gross profit margin	33.4%	41.4%	8 0pp -	31.6%	41.3%	9 7pp -
EBITDA (adj.)	5.0	13.3	62 1% -	9.4	24.3	62 1% -
EBITDA margin (adj.)	15.3%	31.2%	15 9pp -	14.3%	30.2%	15 9pp -
EBITDA	4.3	8.8	51 7% -	8.2	18.9	56 7% -
EBITDA margin	12.9%	20.6%	7 7pp -	12.4%	24.5%	12 1pp -
EBIT (adj.)	1.2	9.5	87 6% -	1.7	17.0	90 2% -
EBIT margin (adj.)	3.6%	22.3%	18 7pp -	2.5%	21.2%	18 7pp -
EBIT	0.4	5.0	92 1% -	0.4	11.7	96 5% -
EBIT margin	1.2%	11.7%	10 5pp -	0.6%	15.6%	15 0pp -

FINANCIAL PERFORMANCE OF BUSINESS AREAS

DOUBLE-DIGIT GROUP PROFITABILITY SUSTAINED

14.3% EBITDA MARGIN (ADJ.) IN H1 2022

• 17.8% EBITDA margin (adj.) in PROFESSIONAL business influenced by:
• Increased prices for raw materials incl. FX effects
• Expansion of global sales staff
• 8.5% EBITDA margin (adj.) in GAMING business influenced by:
• Disruptions in global supply chains
• Temporary closure of Chinese production and logistics sites
• Current trend towards smaller gaming keyboards
• Group EBITDA margin for Q2 2022 sequentially up 1.9pp. from Q1 2022

FURTHER INVESTMENTS IN FUTURE GROWTH

• Research and development
• Higher amortization of capitalized development costs
• Higher internal and external staff costs
• Marketing and selling expenses
  • Implementation of the e-commerce strategy (being adjusted)
  • Higher staff and hiring costs for new sales staff
  • Reclassification of MDF to revenue deductions EUR -0.7m and higher marketing and logistics expenses EUR +0.3m

Administration expenses

• EUR -3.8m share-based program in H1 2021 (being adj.)
• EUR -1.4m IPO expenses in H1 2021 (being adj.)
• Costs relating to a publicly listed company and conversion into SE

STRONG FINANCIAL POSITION AS OF JUNE 30, 2022

TOTAL ASSETS OF EUR 407.7M AS OF JUNE 30

• Strong cash position of EUR 99.7m enables further implementation of growth and M&A strategy
• Net cash is EUR 37.9m
• Inventory level of EUR 52.3m provides for fast delivery capability in e-commerce business
• Equity ratio of 72.0% shows solid balance sheet structure
• Net working capital* of EUR 45.8m mainly reflects strategic build-up of inventories
• 215,318 treasury shares as of June 30, 2022, available as an acquisition currency for M&A

* Current assets (excluding cash and cash equivalents) less current liabilities (excluding financial liabilities).

CASH FLOW AS OF JUNE 30, 2022

in TEUR	Q2 2022	Q2 2021	H1 2022	H1 2021
Net loss for the period	-362	-4.896	-615	-2.539
Depreciation, amortization and write-downs (+) / reversals thereof (-) on fixed assets	3.854	3.687	7.773	7.11
Increase (+) / decrease (-) in provisions	-71	3.707	-97	3.535
Other non-cash expenses (+) / income (-)	738	3.849	828	4.172
Increase (-) / decrease (+) in inventories, trade receivables and other assets	-5.892	-6.878	-8.404	-16.986
Increase (-) / decrease (+) in trade payables and other liabilities	3.290	-327	543	3.374
Interest expenses (+) / interest income (-)	443	9.774	911	13.401
Net Interests (-)	-198	-9.288	-633	-12.207
Net tax effects	1.146	-1.699	-21	-2.310
Other	-2	45	-2	45
Cash flow from operating activities	2.946	-2.026	283	-2.405
Cash paid (-) for investments in property, plant and equipment	-1.680	-1.805	-2.918	-3.616
Cash paid (-) for investments in intangible assets	-1.085	-410	-1.822	-1.282
Cash paid (-) for the purchase of consolidated companies	-1.600	-2.849	-1.600	-3.269
Other	3	98	3	103
Cash flows from investing activities	-4.362	-4.966	-6.336	-8.065
Cash received (+) from equity contributions	-	137.600	-	137.600
Cash paid (-) in the course of the share buyback program	-1.948	-	-1.948	-
Cash paid (-) for capital procurement costs	-	-6.345	-	-6.345
Cash paid (-) for other current financial liabilities (IFRS 16 leases)	-882	-882	-1.880	-1.783
Cash paid (-) for the repayment of (financial) loans	-532	-80.032	-581	-80.069
Other	-	-	5	-
Cash flows from financing activities	-3.362	50.341	-4.403	49.403
Cash-relevant change in cash and cash equivalents	-4.778	43.349	-10.457	38.933
Changes in cash and cash equivalents due to changes in exchange rates,	251	-67	450	349
Cash and cash equivalents at beginning of period	104.198	18.900	109.678	22.900
Cash and cash equivalents at end of period	99.671	62.182	99.671	62.182

UPDATED FORECAST FY 2022 – FURTHER OUTLOOK

IN €M/ AS INDICATED	FY 2021	FORECAST FY 2022
		AS OF MAR. 31	AS OF JUL. 18
Revenue	168.5	170 190 –	150 170 -
EBITDA margin (adj.)	29.0%	23 26% to	14 19% to

FORECAST UPDATE BASED ON:

• Global slowdown in economic growth and rising inflation expected in the further course of the year as a result of the Ukraine war
• Ongoing supply chain disruptions as a result of the lockdowns in China
• Still high inventory levels at customers
• Decline in demand for certain mechanical keyboard switches

FURTHER OUTLOOK

GAMING

Lower revenue level in GAMING business area for fiscal year 2022 than previously assumed (previously: revenue growth in the mid-single-digit percentage range)

PROFESSIONAL

Revenue growth in the low double-digit percentage range for fiscal year 2022 (as previously expected)

Beyond 2022

Continue double-digit growth and expand adjusted EBITDA margin on Group-level

Long-term secular market trends in Gaming, Work-from-anywhere and digital health remain positive despite short-term headwinds

RECONCILIATION TO ALTERNATIVE PERFORMANCE MEASURES (ESMA)

IN € MILLION	H1 2022	H1 2021
Group net profit/loss	-0.615	-2.539
- Income taxes	0.114	0.824
- Financial result	0.911	13.401
EBIT	0.409	11.686
+/- Staff expenses (incl. share-based personnel expenses) / (income)	-	3.659
+ Expenses related to capital market transactions	-	0.988
+ Expenses related to M&A transactions	0.386	0.777
+ Expenses related to natural disaster and pandemics	-	0.012
+ Other non-recurring expenses	0.873	-0.087
Total operating result adjustments	1 259	5 349
Adjusted EBIT	1.668	17.035

IN € 000	H1 2022	H1 2021
Adjusted EBIT	1.668	17.035
+ Depreciation, amortization and impairment losses*	7.773	7.217
Adjusted EBITDA	9.441	24.252
EBIT	0.409	11.686
+ Depreciation, amortization and impairment losses*	7.773	7.217
EBITDA	8.182	18.903

* Including depreciation and amortization of acquired order book.

SHARE PERFORMANCE / CURRENT SHAREHOLDER STRUCTURE

** Based on internal investor reporting to Cherry, not subject to disclosure.

CHERRY SHARE BUYBACK 2022

OVERVIEW

• The Management Board has resolved on June 9, 2022, with the consent of the Supervisory Board, to launch a share buyback program using the AGM authorization of June 23, 2021.
• Within the framework of the Share Buyback Program 2022, up to a total of 2,000,000 shares (corresponding to up to 8.2 % of the existing share capital of the Company) may be repurchased
• from June 13, 2022, to June 30, 2023,
• at a total purchase price (excluding incidental acquisition costs) of a maximum of EUR 25.0 million
• up to a price cap of EUR 14.00 per share.

TRANSACTIONS

Date	No. of shares purchased	Average price (in €)	Purchased volume (in €)
June 13-19, 2022	84,610	8.7961	744,237.00
June 20-24, 2022	81,953	9.4088	771,078.35
June 27-30, 2022	48,755	8.8687	432,394.84
SUBTOTAL Q2	215,318	9.0457	1,947,710.19

CHERRY AWARDS IN FIRST HALF 2022

FINANCIAL CALENDAR 2022

Date	Event
September 5 – 6	Equity Forum
September 19	Berenberg - German Corporate Flagship Conference
November 15	Interim Financial Statement Q3/9M 2022
November 16	Münchner Kapitalmarkt Konferenz
November 18	M.M. Warburg – Meet the Future Conference
November 28 - 30	Eigenkapitalforum

FORWARD LOOKING STATEMENTS

Disclaimer

This presentation contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of Cherry AG and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those described herein due to factors affecting Cherry AG such as, among other things, changes in the general economic and competitive environment, capital market risks, currency exchange rate fluctuations and competition from other companies, and changes in international and national laws and regulations, in particular with respect to tax laws and regulations. Cherry AG does not assume any obligation to update any forward-looking statements.

The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed, for any purpose, on the information contained in this announcement or its accuracy or completeness. The information in this presentation is subject to change.

Market & Industry Data

This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company's industry, the Company's business and the market for the Company's products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company's future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.

General remark

Figures may not add up due to rounding.

THANK YOU FOR YOUR ATTENTION

Cherry AG Dr. Kai Holtmann │ Head of Investor Relations

Einsteinstrasse 174 │ Bogenhausen 81677 München, Deutschland

E-Mail Tel. kai.holtmann@cherry.de +49 175 1971503 Fax +49 9643 20 61 900 Internet www.cherry.de